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2021 (6) TMI 1125 - AT - Income TaxTP Adjustment - correct functional profile of the assessee - HELD THAT:- TPO, in the year under consideration has not properly appreciated the functional profile of the assessee. From the facts on record, it is discernible that the assessee is mainly providing passengers and baggage handling services to its AE and is not providing other specialized airport services as alleged by the TPO. For rendering such services, the assessee has a Net Gross Asset Base of Rs 31,22,65,835/- which comprises of Know How/ Royalty, Temporary Structures, Office equipment, safety equipment's, air-conditioners, data processing equipment, electrical equipment, furniture and fittings, Motor Car, and Plant and Machinery. In the year under consideration, the assessee has incurred total expenditure of Rs 34,73,49,275/- out of which Personnel Expenditure incurred is Rs 20,16,09,112/- which is 60% of the total expense. Therefore, clearly the assessee is a service oriented company deriving its sole stream of income from providing passengers and baggage handling services at the airport. Comparable selection - Companies M/s Container Corpn. Of India Ltd and M/s Sanco Trans Ltd cannot be selected as comparable being functionally dissimilar with that of assessee. TPO had computed the PLI of companies selected by him by presuming that FBT expense is a non-operating item - We have perused the material on record and it is seen that there is no adjudication by the Ld DRP on this issue. We, therefore, direct the TPO to adopt a uniform policy. Once FBT expense is taken as non-operating while computing the PLI of comparable companies, a similar effect should also be given while computing PLI of the tested party. We, therefore, direct the TPO to re-compute the PLI of assessee excluding FBT expense.
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